The Miami real estate market is among the fastest growing in the country, and new opportunities are resulting in increased prices and quicker sales.
First-time homebuyers are having to find creative ways to get into their own homes, according to experts. Most agents say there’s still something out there for everyone, but you have to know where to look.
The growing market is ramping up demand, but as new inventory slows, buyer interest will continue to remain high. That likely means even greater competition down the road.
Miami has been a seller’s market for the last five years, but those on a budget can still get a piece of the action, according to Tiffany Comunale of Comunale Real Estate/Berkshire Hathaway HomeServices. She says both companies and potential residents are attracted to the state because there’s no state income tax and offers big tax incentives to corporations, which results in greater investment and more jobs.
Despite the favorable environment for sellers, affordable deals are still available, she says. “You just need to know where to look, and you need to know the inventory,” according to Comunale.
Christopher Adeleke, a Realtor with Douglas Elliman Real Estate, says Miami’s reputation as a destination is also a major selling point for the city.
“There is a strong demand to live in Miami,” he says. “It’s a world-class destination known for its beautiful beaches, year-round warm weather, thriving culinary scene and expanding cultural scene.”
He notes that in Douglas Elliman’s first-quarter report, the company saw a “strong and consistent demand for South Florida real estate.”
“Buyers saw the opportunity to jump into the market, as sellers seemed to decide that this was a good time to sell — with the result being increased pricing governed by increased inventory and homes spending less time on the market,” said Jay Phillip Parker, Douglas Elliman’s Chief Executive Officer for Florida, in the same report.
Karen Elmir, CEO of The Elmir Group and a Realtor for Cervera Real Estate, says she believes that in the next few years, prices will even go higher as the level of inventory coming online begins to taper off. “The market keeps growing, so there’s a lot of demand, and that’s what causes prices to go up,” she says.
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New strategies in a tight market
Comunale says the market is getting tighter — she notes a 3.5 percent decline in sales from 2017 to 2018 is due simply to the lack of inventory — but first-time buyers are finding ways to get into the game. Some are buying duplexes and using the income to decrease their debt-to-income ratio. That helps as they plan to purchase their own home, Comunale says. She says it’s increasingly important to choose your lender wisely, because some are “becoming more flexible with (lending) guidelines, which allows buyers to buy and afford more. It’s important to have someone experienced to handle that portion of the process.”
Elmir also notes there are always opportunities available in the Miami area, whether it’s in a boutique building or a luxury high-rise. “That’s my job — to find the opportunity,” she says.
She says it’s important to get to know the buyers’ needs. New buildings in East Edgewater, for example, have properties near the beach with restaurants right on the water, she says.
On the seller side, Comunale says the hot market is transforming some neighborhoods, with investors buying and renovating properties. “Investors are buying less desirable properties and making them beautiful,” she says. “It increases the value in the neighborhood and presents more turnkey options for buyers, which is what the Millennial buyers are looking for.”
What buyers want
Adeleke says the trends that will dominate in 2018 are mostly associated with livability.
“Waterfront properties are high in demand, whether it’s for a primary residence or a second home,” he says. “Luxury buyers are looking for single-family homes where they can dock their boat in their backyard, or a luxury condo building that offers an elevated level of concierge services which transforms everyday living into an extraordinary experiences, like the 1 Hotel & Homes in South Beach..”
Adeleke says developers also need to keep up to date on technology, noting, “A property can be deemed out of touch if it doesn’t offer apps that let residents control AC, lights, switches, sensors and locks while they’re away.”
Green spaces such as open air private parks, dog runs and dog park access are also a must, and buyers are increasingly looking for properties that offer walkability, he says. “Carless cultures are on the rise, so walking distance to neighborhood amenities like bars and restaurants and easy access to farmers’ markets and city centers also play into a buyer’s needs to live healthier lifestyles,” Adeleke says.
Elmir says millennials and young professionals are looking to live in areas like East Edgewater, Brickell and downtown in search of units with the best amenities. Areas with nearby restaurants, bars and buildings that have a sauna, pool or spa are a big win for buyers, she says. Those with families are looking in areas like Coconut Grove, which offers some of the best schools, markets and close proximity to hospitals.
Comunale echoed Adeleke’s sentiment that younger buyers want turnkey units with close proximity to restaurants and nightlife. “Boutique builders will continue to build new construction projects on small parcels of land throughout the area in all price points,” she says. “This process will continue to improve the areas. Investors will continue to fix and flip, making more turnkey options available.”
She says some of the newest trends in new construction include impact storm windows, open-concept floor plans, mega islands and kitchens, and “smart homes with all the bells and whistles of a concierge lifestyle.” So-called mother-in-law suites also are a unique trend beginning to take hold in the Miami market. “This is a great option for families with small children or large families that need a nanny, caretaker or full-time housekeeper,” Comunale says.